Ask the Finance Expert

Farnoosh Torabi answers questions on the hot topics and gives advice for shopping and saving.

Rent or Own?

Farnoosh Torabi (FT): Home ownership is a fantastic long-term investment. If your purpose in buying a home is to live in it for many, many years and you have the financial ability to do this right now, go for it. There are actually a lot of great deals out there.

If you are purely interested in making a short-term return on a real estate investment, know that the days of flipping houses in six months or a year for a fat profit are long gone -- at least in most areas.

Rise in Rates

FT: First things first: Make every attempt to pay your mortgage. Second, talk to the loan officer at your bank. See if there is any loan modification or refinancing plan for which you can apply. You also may want to consider renting out a room. More families are doing this to supplement their monthly mortgage payment. Make sure you are re-examining your budget and cutting the fat out of your daily expenses as much as possible to free up cash to put toward your mortgage.

Cash for Goods

FT:Unworn clothing. Designer label clothes, handbags, and lightly worn shoes from your closet -- preferably with their tags still on -- price well at upscale consignment shops. Consigners can earn up to 50% of the resale price.

Old toys. With more than 600,000 auction listings on eBay, old-school toys, board games, and dolls are in demand.

Loose change. America could be $10 billion richer ($90 per household) if it simply cashed in all the loose coinage lying around, according to Coinstar, which operates coin machines in more than 15,000 supermarkets worldwide.

Online Shopping

FT:Sign up for sale alerts. Don’t have time to scour the Web for deals? Have them arrive in your inbox, thanks to sites like Shop It To Me,Gilt,Rue La La, and She Finds. A note of caution: Either set up a different e-mail account for this purpose or create a filter in your existing e-mail account.

Seek free shipping and free returns. At RevolveClothing.com, shipping is free, and if you’re not happy with the item, the retailer provides prepaid mailing labels. Same goes for footwear retailers Zappos and Piperlime.Nordstrom also provides a free mailing label if you want to exchange an item.

Look for hidden deals online. The biggest coupons and deals are not always issued directly from the retailer. Sometimes you have to dig around. Go to Google or Yahoo and type in the search words "Macy’s" (or whichever store you want) + coupon + promo code + discount. RetailMeNot.com is one of my favorite sites at which to find deals.

Decorating Savings

FT:Scour the Web. Sixty percent of people shop online today before going into a store, according to furniture experts. But the Web shouldn't be the only place to search. If you're not sure about an item’s listing online, visit the related store to see it in person.

Buy multipurpose furniture. My queen-sized bed also functions as a place to store my winter sweaters and extra sheets. Something as simple as a step ladder can also be used to display plants or picture frames.

Stop by yard sales and estate sales. Some advice: Dress down and don’t drive up in a fancy car. Next, carry cash, and not all in one place. Don’t let the sellers see that you have, say, a $100 bill in your wallet. Instead, keep a $10 in one pocket, a $5, and a $20 elsewhere. As for estate sales, consult the almighty CraigsList, as well as gsalr and EstateSales to find where they’re happening in your neighborhood.

Save or Spend?

FT: I’m usually not as boring as this, but I have to say, first, pay off your debt. Give yourself the gift of debt freedom. If you don’t have to pay down debt or if you have money left over from paying off your plastic, put it in a savings account. Who knows what’s in store for 2009? The job market is souring and it’s more important than ever to have a solid savings of at least three to six months (or more, if you can)!